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3The main aim of this empirical project is to formulate the problem to be studied and interpretthe results1. The dataset to be studied comes from Ramanathan - GRETL. The paper is divided into three main parts. These are: introduction, formulation of thegeneral model, Data 6-5 Softwood Harvest in Oregon Model Formulation, hypotheses testing,conclusions and appendices. As far as the methodology is concerned, the Ordinary Least Squares (OLS) estimation isthe main source used to conduct the research on the data. Test for normality of residuals,autocorrelation, specification and heteroskedasticity are the next to be interpreted. The essaywill evaluate both static and dynamic models in order to choose the one closer to the data. The main sources of knowledge used for conducting the research are: the RamuRamanathan’s book Introductory Econometrics with Applicationsand Tadeusz Kufel’s workEkonometria. Rozwiązywanie problemów z wykorzystaniem programu GRETL.2.Formulation of the General ModelSimple linear regressionis alinear regressionmodel with a singleexplanatory variable(X)related to the dependent variable (Y). Multiple regression model is an extension of simplelinear regressionin which more than one independent variable (X1, X2,... ) is used to predict asingle dependent variable (Y).Since the dataset includes more than one explanatory variables related to the dependentvariable, multiple regression model is the one to be used for the dataset. The multiple linearregression model is represented by the following equation: Yt= β0 + β1Xt1 + ... +βkXk +ɛtƐt stands for the unobserved random variable- random error used to represent the discrepancyor uncontrolled variation between an observedvalue and the value predicted by a model.

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